#USDJPY @ 144.320 continues with its struggle to gain any meaningful traction on the last day of the week. (Pivot Orderbook analysis)

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• USD/JPY continues with its struggle to gain any meaningful traction on the last day of the week.
• Retreating US bond yields drags the USD to the weekly low and acts as a headwind for the pair.
• The Fed-BoJ policy divergence continues to lend support to the major and favours bullish traders.

The pair currently trades last at 144.320.

The previous day high was 144.81 while the previous day low was 144.06. The daily 38.2% Fib levels comes at 144.53, expected to provide resistance. Similarly, the daily 61.8% fib level is at 144.35, expected to provide resistance.

The USD/JPY pair prolongs its consolidative price move on Friday and remains confined in a four-day-old trading range through the early European session. The pair is currently placed just below mid-144.00s, down less than 0.10% for the day, and is influenced by a combination of diverging forces.

The US dollar surrenders its modest intraday gains and languishes near the weekly low amid a further pullback in the US Treasury bond yields, which, in turn, acts as a headwind for the USD/JPY pair. The UK debt market seems to have stabilized following the Bank of England’s intervention for the second day on Thursday. The spillover effect drags the benchmark 10-year US Treasury note away from a 12-year high set earlier this week and weighs on the greenback.

The Japanese yen, on the other hand, draws support from mostly upbeat macro releases. In fact, official data showed that Industrial Production rose 2.7% in August from the prior month, surpassing estimates. A separate reading revealed that Japanese retail sales grew more than anticipated during the reported month. Furthermore, the unemployment in Japan edged down to 2.5% from the 2.6% previous, matching expectations and underpinning the domestic currency.

That said, a modest recovery in the risk sentiment – as depicted by a turnaround in the US equity futures – acts as a headwind for the safe-haven JPY. This, along with a big divergence in the monetary policy stance adopted by the Bank of Japan (dovish) and other major central banks, including the Federal Reserve, supports prospects for the emergence of fresh buying around the USD/JPY pair. Hence, any downtick could still be seen as a buying opportunity.

Market participants now look forward to the release of the Fed’s preferred inflation gauge – the US Personal Consumption Expenditures (PCE). Friday’s US economic docket also features the Chicago PMI and revised Michigan Consumer Sentiment Index. This, along with the US bond yields, will influence the USD price dynamics and provide a fresh impetus to the USD/JPY pair.

Technical Levels: Supports and Resistances

USDJPY currently trading at 144.41 at the time of writing. Pair opened at 144.47 and is trading with a change of -0.04 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 143.29, 50 SMA 138.66, 100 SMA @ 136.05 and 200 SMA @ 127.82.

The previous day high was 144.81 while the previous day low was 144.06. The daily 38.2% Fib levels comes at 144.53, expected to provide resistance. Similarly, the daily 61.8% fib level is at 144.35, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 144.09, 143.7, 143.34
• Pivot resistance is noted at 144.83, 145.2, 145.58

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